WATCH PRICES: Denis Asch “I wanted to sell watches, not prices”

COMMENTS BY Denis Asch (Europa Star Arcade, November 2016),
watch expert and former retailer who closed his shop rather than
change profession.

“I opened in 2001 in the right place and at the right
time. I was astonished by the ease with which I
could sell expensive watches. The price was of secondary
importance. People only asked the price
at the finish. People didn’t ask for any discount,
they wanted the watch whatever it cost. Then the economic
situation and buying habits gradually changed. The curve
was reversed: people asked for the price
first of all, then they began asking for a
reduction.

Up to 2008, we sold watches, not prices.
I sold Richard Mille or Greubel Forsey
watches at the full catalogue price. Today,
if you offer 10% off the same watch, people
laugh in your face.
When I’d sell an Eberhard to a student,
for example, he’d scrimp and save to
buy it, so I’d spend as much time with
him as with a well-informed collector
of Greubel Forseys. But gradually, I
spent less and less time selling complex
watches. People would phone up and
ask “have you got that in stock? I’ll drop in later” – and after
five minutes in the shop they’d make out a big cheque, and
that was that. It’s true that customers were better and better
informed, by the blogs in particular.

“Is it a good investment?”

The curve was reversed from 2007: people began asking me
if a Richard Mille watch was an investment. By the end, one
person out of every two would ask if it was an investment.
There was no more impulse buying from collectors or bankers
who wanted to treat themselves. For them, the word
“spend” didn’t even exist anymore.

Today, people – at least some of them – are richer, but what
has changed is the way they buy and the way they spend. And
it has to be said that some brands asked abusive prices and
some customers were taken in by false promises or false values.
I asked new brands that weren’t well-known and had no
complications why they were selling such expensive watches?
They didn’t really have any answer. But at the same time,
it’s not solely the fault of the brands. If
there are stupid programmes on the TV,
it’s because people watch them.

I wanted to sell watches, not names or
prices. But I was one of the few retailers
that did! Between 2001 and 2007, I had a
profit margin of around 40%. My lowest
average mark-up was 35%. Most brands
were giving 50%. Too many watch boutiques
wanted to sell at any price, or
sell off stock just to make money, and
the brands realised that: “Since you’re
selling at a lower price, we’ll lower your
margins. You swallow the discount.”
It’s because of the ones who sold prices
and not watches that profit margins came down. Too many
retailers gave discounts. I got friends to phone up and test
boutiques, and it was incredible to see how many retailers
gave a discount of 20% without even meeting the customer.
The brands realised. Retailers have shot themselves in the
foot. As for me, I lost sales because I refused to give discounts
of more than 10%. But not many of us were able to resist.
My approach was more purist than commercial. I foresaw
trends and gave up retail: on the one hand I could see the
trend towards discount prices and also, people had less need
of my explanations and expertise. Or they came to see me
for my explanations and then went and bought the watch
in Singapore.”